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This discussion is a mystery (to me). :( Can a computer be be programmed to display candlesticks? Yes. Can a computer be programmed to recognize particular patterns, like hammers, dojis, etc. Yes. Can a computer be programmed to generate buy/sell signals? Yes. Can the buy/sell...

I get so many visitors to my website and so many "coin tossing" questions, I reckon it's time to generate a spreadsheet. :D

Okay, the latest spreadsheet counts Heads, Tails and the Difference: Heads - Tails. If (for example) you force 500 heads, the cumulative Heads will be greater than the cumulative Tails by (roughly!) 500. Perhaps that's the chart you remember seeing. Eventually, however, those 500 heads...

Paul: Theoretically speaking, a series of all heads would have no long term effect on the percentage of heads. Eventually, those heads would be buried by the later tosses ... assuming there are a jillion later tosses. :D Anyway, I've modifed the spreadsheet so you can force a series of...

Paul: I did (once upon a time) have a chart of the percentage of Heads in umpteen coin tosses, but can't find it now. :( However, I've just made up a spreadsheet that'll toss 10,000 coins and show the percentage of heads, like so: It's rather large, 2 Mbytes, 'cause it contains 10,000...

You might take a peek here: http://www.gummy-stuff.org/RTM.htm or even here: http://www.gummy-stuff.org/coin-tossing.htm or maybe here: http://www.gummy-stuff.org/mean-regression-2.htm

Once upon a time I wrote up something on candlesticks and larned a bunch of neato words, like "spinning tops" and "hammers" and "dojis", each of which seems to make some Buy/Sell decisions by looking at a candlestick pattern for a single day. Then I decided to look at the evolution of the...

Found another one that'll do 8 stocks :D http://www.gummy-stuff.org/stock-correlations.htm

There's a spreadsheet described here: http://www.gummy-stuff.org/weekly-data.htm It'll download historical prices (and provide some pretty charts) for four stocks. I also have spreadsheet(s) that'll do more than four ... but can't remember which ones ^#$@!*?

I tend to agree. :) However, if the returns of stock Y are uniquely determined by the returns of stock X as, for example, when (y-returns) = (x-returns)^3 it's difficult to understand a statement that says they have a low correlation. It's even more confusing (to me, at least) to see...

There are a jillion ways to generate y-returns, given the x-returns. My purpose was to illustrate that it's possible for securities to go up and down together ... yet a correlation of -1. Indeed, it's possible to go in opposite directions yet have a correlation = +1. I've done that...

Actually, I invented ten random x- returns (a la NORMINV(), in Excel). Then I generated the y-returns via: y = ax + b (with your choice of "a" and "b"). The spreadsheet is available, to play with :D Many think (me included, until recently!) that (for example) Investopedia's explanation is...

And if they both have a positive change. Can the correlation be -1? You'll have noticed that the question explicitly refers to the "correlation between returns".

Aha! Afraid to guess, eh? :) My guess was way off! Thanks to all who participated. For the answer, check out: http://www.gummy-stuff.org/perfect-correlation.htm#QUESTION

Sam invests $1K in Stock X. Sally invests $1K in Stock Y. The performance of each is shown. Would you say the correlation between returns is positive or negative?

Interesting to look at DMI+/- just before the '87 crash :) There's a spreadsheet called VDX-Plot.xls to play with, here http://www.gummy-stuff.org/Excel/ It'll tell you when to Buy-Sell-Hold and it's guaranteed to make you a million (assuming you start with $2M). The spreadsheet...

I've been trying to find a reference to somebuddy who's actually tested Regression Channels on historical data. Anybuddy here know of such a study? P.S. My quest is (of course!) in support of a tutorial :)

Hmmm ... never noticed that before :( It sho nuff makes the ^GSPC candlestick look strange: I reckon it's Standard and Poor's fault, not Yahoo's. Here they provide an explanation (sort of): The opening index value (9:31 am) which is available on standardandpoors.com reflects the 500...

Thanks steveqee58. Do you mind if I stick your comments here? If so, I'll remove it. I've spent some time surfing the net (that's my daily exercise), looking for personal experiences with P&F charts. Not much of that around, it seems.

Does anybuddy here use P&F Charts? If so, can you tell me what you look for? Although I find them interesting, I can't for the life of me tell what one would look for :( Any comments would be greatly appreciated.